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Diploma Mill Concerns Extend Beyond Fraud

The man said he was a retired military officer from Syria, which the American government deems a sponsor of terrorists. He wanted credentials as a chemical engineer, useful for getting a visa to work in the United States. Could James Monroe University help?

For $1,277, it did. Within days, he received three undergraduate and advanced degrees in chemistry and environmental engineering, based on his “life experience,” according to documents in federal court. Although the degrees looked authentic, Monroe had no faculty or courses; the “adviser” evaluating “life experience” was a high school dropout.

Monroe was one of more than 120 fictitious universities operated by Dixie and Steven K. Randock Sr., a couple from Colbert, Wash., who sold diplomas for a price, according to a three-year federal investigation that ended in guilty pleas from the Randocks to mail and wire fraud. The inquiry into their diploma mill, which operated most often as St. Regis University, provides the most up-to-date portrait of how diploma factories can harness the rapidly evolving power of the Internet to expand their reach.

The Randocks will be sentenced on Wednesday. Six former employees have also pleaded guilty to federal charges and await sentencing.

Through their lawyers, the Randocks declined to comment; the court documents describe an operation that grew from a trickle to a flood from 1999 to 2005, when the authorities shut it down after its transaction with the Syrian officer, who was actually a Secret Service agent. The company became more inventive and bold, with revenues growing from $5,000 in 1999 to $1.65 million in 2005, and churning out more than 10,000 diplomas for customers in 131 countries.

The Randocks took in more than $7 million, said Thomas Rice, a spokesman for the chief federal prosecutor in Spokane. They created 121 fictitious universities, and produced counterfeit degrees claiming to be from scores of real universities, the court papers say.

“If they got their money, you got your diploma,” Mr. Rice said.

It is difficult to pin down how many diploma mills exist, or how many bogus degrees are bought each year, said George Gollin, a board member of the Council for Higher Education Accreditation, the federal government’s recognized authority on accrediting agencies. But Dr. Gollin, who assisted investigators in the case, estimated that such companies sold 100,000 to 200,000 phony degrees a year.

Officials say they are concerned by growth in the industry and about the potential for terrorists to use bogus degrees to obtain United States visas.

Law-enforcement officials say there are many obstacles to prosecution. Federal law is murky, lacking even a working definition of a diploma mill; and, in 2006, Congress eliminated a requirement that online colleges and universities provide at least half their courses in actual classrooms, making it more difficult to detect bogus operations.

A spokesman for the Federal Bureau of Investigation referred questions about diploma mill prosecution to the Education Department, as the “lead agency” in going after the companies. But Jane Glickman, a spokeswoman for the department, said it had no authority over the businesses.

About 20 states have passed laws to crack down on the trade in bogus diplomas, but companies simply relocate to other states. Some, like Oregon, have tried more comprehensive approaches, making it a crime to use degrees from diploma factories named on a state Web site.

Congress is moving cautiously, almost hesitantly. In February, the House defined diploma mills as entities that award degrees for “little or no” coursework and that lack accreditation by any government-recognized entity, in a bill that also creates a task force to recommend ways of cracking down on diploma factories.

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A 2004 report by the Government Accountability Office, which surveyed only 2 percent of federal employees, found 463 who had bought degrees from three diploma mills, but warned that the true number was probably much higher.

More than half worked for the Defense Department, where the then deputy undersecretary for personnel and readiness, charged with overseeing two million Pentagon employees, claimed a master’s degree from Columbus University, which left Louisiana after officials there demanded proper accreditation.

Among the St. Regis customers, 350 were federal employees, said Malcolm Wiley, a spokesman for the Secret Service, and 14 were New York City firefighters, who used the credentials to win promotions and raises, and paid fines totaling $135,000.

The investigation into St. Regis, prompted by articles in The Spokesman-Review of Spokane, offers an intriguing X-ray of diploma mills in the modern age. Thanks to the Internet, they can market themselves internationally at little cost, flood e-mail inboxes with spam and operate without revealing an address or spending heavily on advertising.

Technology is also easing the way for fraud on a once-unimaginable scale. Cutting and pasting with abandon, St. Regis created virtual facades to make institutions appear authentic, the court papers said. Its Web site, for the nonexistent Robertstown University, featured a picture of Blenheim Castle, the birthplace of Winston Churchill, suggesting it was part of Robertstown’s campus, the indictment said.

Alongside the phony entities, the Randocks began to offer counterfeit degrees from legitimate universities, the court documents said. The couple offered false transcripts and letters of recommendation, and special telephone lines to verify the credentials to employers.

They created a Registrar of Official Academic Records to certify phony transcripts and an Official Transcript Archive Center, in reality a post office box. Moving into what experts describe as the next frontier, the Randocks created accreditation mills to give a veneer of legitimacy to the bogus operations.

According to court documents, the Randocks went so far as to bribe Liberian government officials to obtain accreditation for their phony institutions. A raft of Liberian officials were implicated in the scheme, including Abdullah Dunbar, then deputy chief of the Liberian embassy in Washington, who was filmed agreeing to accept money at the Mayflower Hotel.

The Randocks created Web sites meant to appear as if they were the official Web site of the Liberian embassy. There, visitors were told that St. Regis and the Randocks’ other holdings were authentic, accredited institutions, recognized in Liberia. At the time of their arrest, the Randocks had taken steps to open a St. Regis office in Liberia. Had they succeeded, their stable of phony universities would have been beyond the reach of American authorities, Dr. Gollin said.

“What was so impressive about their operation was how sophisticated it was,” he added.

A version of this article appears in print on , on Page A14 of the New York edition with the headline: Diploma Mill Concerns Extend Beyond Fraud. Order Reprints|Today's Paper|Subscribe